If all of the business move out of Californian, who’s going to ride on Governor Moonbeam’s $64 billion bullet train?
To hear Hillary Clinton and Bernie Sanders, you’d think that taxes can go up to 60% or even 80%, and businesses and investors will just … pay up. But the growing number of businesses stampeding out of high tax areas suggest that they’re very wrong.
Meanwhile, the Carl’s Jr. move puts more egg on the face of California and the political class in Sacramento. Hamburger fast food chain Carl’s Jr. was founded in California and for years has been headquartered in Carpinteria, California. The highest income tax rate in California is 13%, so moving to Tennessee, where the tax rate is zero, will save the company millions of dollars on taxes a year.
Yes, we know that CKE’s official line is that the firm is relocating because it has less need for office space as it consolidates operations. But the company executives say this with a wink. Tax savings are a big factor, as is the stifling regulatory environment on the left coast, where businesses are treated like villains and rich people as cash dispensers for big government programs. It’s not a coincidence that CKE’s CEO Andy Puzder has been one of the leading critics of high taxes and onerous rules in Washington D.C. and Sacramento.
The state legislative group ALEC finds in its latest “Rich States, Poor States” rating of the states on business climate that California ranks 44th of all the states in business competitiveness. California has lost roughly 9,000 companies over the last decade, with most of them moving to Texas, Florida, and Tennessee. Last year, in a major loss, Toyota moved its North American headquarters from the Golden State to North Texas.
Thanks to its high taxes and burdensome regulations, California’s hemorrhage of jobs and businesses won’t end soon.